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When Broadcom took over VMware, most people expected a few adjustments, maybe a price tweak here and there. Instead, what landed felt more like a tidal wave. Overnight, long-familiar bundles disappeared, perpetual contracts were gone, and IT managers suddenly had to learn a new vocabulary around licensing.
The ripple effect has been obvious. We hear from CIOs, sysadmins, and even CFOs who all ask the same thing in different words: What exactly did Broadcom change, and what do we do about it? For many, it’s not just a licensing problem but a budgeting, compliance, and future-planning problem all rolled into one.
At OTAVA, our role is to help people understand what the new rules mean, identify where costs can spiral, and build a strategy that holds up under audits and market shifts. This post pulls together the most common questions around the VMware License right now.
The biggest change is simple: Perpetual licenses are gone. Customers can no longer buy once and tack on support later. Everything now runs through subscription bundles such as VMware Cloud Foundation (VCF) or VMware vSphere Foundation (VVF).
Another shift is the minimum core requirement. For years, licensing started at 16 cores per CPU. Broadcom raised that floor to 72 cores per product in April 2025. For small or mid-sized environments, that adjustment alone has driven costs up by 200% to 350%.
Entry-level kits like Essentials Plus and ROBO have also been retired. For SMBs, it’s like losing the affordable doorway into virtualization.
As a contracted Broadcom VCF partner, we work with customers during the transitions. We also align previous entitlements with the new subscription option, and we assist IT leaders in comparing the two and capturing detailed planning that reduces surprises.
Subscription models shift costs from one-time capital expenses to recurring operational ones. For some enterprises, that predictability has value. For others, especially SMBs and mid-sized organizations, it’s a tough pill to swallow.
European regulators noted that in certain cases, VMware pricing jumped by 800% to 1,500%. Those cases reflect how dramatic the new minimums can be when applied to leaner environments. We’ve seen mid-sized businesses double their licensing costs simply to maintain existing workloads.
Total cost of ownership also changes. Subscriptions lock organizations into a rhythm of renewals that may collide with other budget cycles. If you miss a renewal, Broadcom applies a 20% penalty on the first year of the new contract.
This is where OTAVA’s role as a Broadcom VCF partner makes a difference. We build cost-optimization strategies that take entitlements, workloads, and renewal timelines into account. That way, IT leaders aren’t blindsided by sudden hikes or overlooked deadlines.
Licensing today isn’t just about paying the bill. It’s about staying audit-ready. Broadcom has stepped up its enforcement, and VMware’s own EULA lets them check your entitlements for up to two years after they expire. That’s a long shadow for any IT team to work under.
The biggest traps are simple but costly. Using more cores than you’ve licensed is one. Missing a renewal deadline is another. Broadcom now adds a 20% penalty if you renew late, which can turn an oversight into a financial hit.
VMware Cloud Foundation 9.0 helps a little by showing licensed versus used capacity in real time. That visibility matters, but dashboards can only go so far.
At OTAVA, we run compliance reviews that map entitlements to workloads, document the findings, and prepare defenses long before an audit lands. And because we’re a Broadcom VCF partner, we also have direct channels to escalate questions when clients need clarity.
It’s one of the most common questions we hear, usually asked with frustration: Is there any way back to the old model? The answer is no. VMware has closed the door on perpetual licenses, and if you stay in their ecosystem, subscriptions are the only option.
That doesn’t mean you’re powerless. Some companies are stretching their investments with third-party support firms like Evernex or NovaCloud. Others are testing different hypervisors, such as Proxmox, Hyper-V, or KVM, to cover specific workloads without adding more VMware spend. None of these is a perfect substitute, but they can ease pressure in the right situations.
Industry watchers believe VMware could lose roughly 35% of workloads by 2028 as customers weigh these choices. However, most migrations aren’t quick. For many, the practical path is to stabilize today’s VMware License while sketching a long-term backup plan.
That’s where we come in, helping organizations optimize what they have now and design “what if” strategies for the future.
Not every update has been painful. VMware Cloud Foundation 9.0 rolled out changes that make the day-to-day easier to manage. Instead of juggling multiple SKUs, you now work with a single license file. The evaluation period has also been extended from 60 to 90 days, which gives teams more time to test before committing.
Deployment is more flexible, too, with both connected and disconnected modes available for different environments. Perhaps the most useful change is the built-in dashboard that shows licensed versus used cores, reducing guesswork.
These improvements don’t cancel out higher costs, but they cut back on the friction. For teams that plan to stay on VMware, even small simplifications carry weight.
Broadcom has made its focus clear: enterprise customers are the priority. Smaller organizations are already feeling squeezed out, while large enterprises are steered toward consolidated bundles like VCF and VVF.
This consolidation aligns VMware more closely with cloud-native and hybrid strategies. For some, that’s a good fit. For others, it feels like paying for capabilities they don’t need.
At the same time, the broader market for virtualization is experiencing growth. In areas such as the Middle East and Africa, data center virtualization is predicted to accelerate with nearly a 20% CAGR. The need is there, but the entities creating that need could change with time.
Regulatory pressure is also worth watching. Groups like CISPE have raised concerns over Broadcom’s licensing practices in Europe. The outcomes of those challenges could influence how VMware evolves globally.
For customers, the takeaway is simple: Expect more consolidation and enterprise focus, but stay flexible in your planning.
Licensing is rarely exciting, but it’s foundational. If your VMware entitlements aren’t aligned with workloads, compliance, and budgets, the risks stack up fast.
As one of the few authorized Broadcom VCF partners, OTAVA offers something many providers cannot: continuity. When Broadcom sunsets the old VMware Cloud Service Provider (VCSP) program in October 2025, many MSPs will lose their ability to deliver VMware licenses. We won’t. That means we can keep your environment licensed, compliant, and supported without disruption.
We also respect the channel. For MSPs, our “no customer poaching” policy protects your relationships. For enterprises, our bundled services, including VMware, Veeam backup, and compliance-ready infrastructure, deliver resilience without surprise costs.
Some organizations come to us worried about renewal penalties. Others are looking to control spend or map out a hybrid cloud future. Whatever the case, we help with assessments, migrations, audit defense, and managed hosting.
If Broadcom’s licensing changes have left you uncertain, reach out. We’ll cut through the noise and build a strategy that works for the long run.
